TaxTMI 
TaxTMI 
2026 (7) TMI 96
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....peals are given herein below: Appeal No. ST/51281/2015 ST/51280/2015 Period involved April 2005 to March 2010 October 2010 to March 2012 Service Tax involved Rs.11,92,449/- Rs.19,86,250/- SCN date 30.05.2011 18.10.2012 OIO date 29.08.2012 29.11.2013 OIA date 19.01.2015 For the sake of convenience, the facts of Appeal No. ST/51281/2015 are being taken up. 2. Briefly stated facts of the case are that the Appellant Municipal Corporation, Mohali, are a sovereign local body. During the relevant period, an inquiry was conducted by the Department and a view was formed that the Appellant had been engaged in the "Selling of Space for Advertisement" to the different parties and had not paid the service tax on the amounts so received, which they were liable to pay under the category of 'Selling of Space for Advertisement' taxable under Section 65(105)(zzzm) of the erstwhile Chapter-V of the Finance Act, 1994. On this allegation, a Show Cause Notice dated 30.05.2011 was issued to the Appellant demanding service tax amounting to Rs.16,84,150/- by invoking the extended period of limitation for the period from April 2005 to March 2010, alon....
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....eard both sides and perused the material on records. 4. The learned Counsel for the Appellant submits that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts & the law and the binding judicial precedents. 4.1 He further submits that the activity of Selling of Space for Advertisement as per Section 65(105)(zzzm) of the Finance Act was taxable if a person provides service to another person. He then refers to the definition of "taxable service" as provided in Section 65(105)(zzzm) of the Finance Act, 1994 and submits that the word 'person' was not defined in the Finance Act, 1994 prior to 01.07.2012 but has to be referred to the General Clauses Act, 1897 where the 'person' has been defined as under: "2(42) Person shall include any Company or association or body of individuals, whether incorporated or not". He further submits that the Appellant being a "local body" is not covered within term "person" and consequently, not covered under the definition of "taxable service" as provided under Section 65(105)(zzzm) of the Finance Act, 1994 for the purpose of levy of service tax. In this regard, he places relianc....
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....ts charged as 'licence fee' are nothing but advertisement tax, thus, it has been erroneously held by the Commissioner (Appeals) that amounts charged cannot be treated a tax as give and take principle is involved. He further submits that the advertisement tax being a statutory levy is not leviable to service tax as held by the Tribunal in the case of Karad Nagar Parishad Vs. Commissioner of C.Ex. & S.T., Kolhapur - 2019 (20) GSTL 288 (Tri-Mum). 4.3 The learned Counsel further submits that the Appellant have performed the statutory activity as a sovereign body; the amount collected by the Appellant, has been deposited in the Government Treasury to be used for the public interest; therefore, the said activity cannot be held to be taxable. In this regard, he refers to the Board's Circular No. 89/7/2006-ST dated 18.12.2006. 4.4 The learned Counsel further submits that the Department has not brought any evidence to substantiate that the Appellant have charged any amount other than advertisement tax, which could be treated as 'consideration' for the purpose of levy of service tax. 4.5 The learned Counsel further submits that the entire demand for the financial years from 2005-06 ....
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....t the State and the Police Department is not covered under the definition of a person providing the security service; and accordingly, the demand was set aside by the Tribunal and further, the said decision of the Tribunal has been upheld by the Hon'ble Supreme Court, as cited supra. Similarly, the Tribunal in the case of M/s Indian Red Cross Society (supra), has held that the Government is not covered by the term 'person' prior to 01.07.2012 when the word 'person' was not defined in the Finance Act, 1994. Therefore, by following the ratios of these decisions, we hold that the Municipal Corporation is not a 'person' and hence, it does not fall under the ambit of service tax. 8. Further, we find that the learned Commissioner (Appeals) has wrongly held that the amount received by the appellant as 'Licence fee' cannot be equated with 'advertisement tax' leviable under Sections 90 and 122 of the Municipal Corporation Act. We also find that in fact, the properties which were given to the different persons for placing advertisements, are not owned by appellant but are owned by GMADA which were handed over to the Appellant for maintenance, repair and management of parks, green belts, b....